The Evidence and Impact of Financial Globalization

Chapter 25

Policy Issues of China’s Financial Globalization

J.R. Barth*,^†, L. Li^‡, T. Li^† and F. Song^‡

^*Auburn University, Auburn, AL, USA

^†Milken Institute, Santa Monica, CA, USA

^‡University of Hong Kong, Pokfulam, Hong Kong SAR, China

Outline

China’s Capital Markets Grow in Both Importance and Scope

Bond and Equity Markets Provide a Growing Source of Funds

Opening of China’s Capital Markets to Foreign Investors and Firms

China’s Expansion Overseas Through Merger and Acquisition Activities and Foreign Investment by Firms

Monetary and Foreign Exchange Policy

Monetary Policy

China’s Monetary Policy Targets

China’s Monetary Policy Instruments

Exchange Rate Policy

Conflicts Between Monetary Policy and Exchange Rate Policy

Future Developments in China ...